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Souvenirs Update & Forecast

Nov 1, 2009
by Kevin Zimmerman

Souvenir companies have understandably been buffeted by the economic downturn in ways that many other businesses have not. On top of the general slowdown in consumer purchases across the board, sales of keepsakes and trinkets picked up on trips and vacations have gone down, as companies cut back on business trips and families trend towards shorter holiday trips, or elect to remain at home for a "stay-cation."

According to recent data released by the U.S. Office of Travel and Tourism Industries, business from foreign tourists visiting the U.S. fell by 17 percent in the first half of the year, while Americans traveling abroad spent 13 percent less than in the same period of 2008. And business continued to decline as the year progressed. May saw a 23 percent decline in foreign tourism spending in the U.S., compared with the same month a year earlier, while June dropped by 22 percent and July fell by 24 percent. Meanwhile, Americans spent $57.5 billion traveling abroad the first half of the year; down 13 percent from the same period in 2008.

At the same time, U.S. vacation timeshare sales may fall this year by as much as 30 percent from 2008, according to the American Resort Development Association. U.S. timeshare sales fell by 8.5 percent last year to $9.7 billion, from a peak of $10.6 billion in 2007, excluding the luxury fractional business and private residence clubs. That decline was the industry's first since 1975. Even the normally chipper American Automobile Association has been unable to avoid delivering bad news. The group projected that 39.1 million travelers would take a trip of at least 50 miles from their homes during the Labor Day holiday, a decrease of 13.3 percent from 2008. That decline was due in part to Labor Day falling late this year, on Sept. 7, when school had already begun for many children.

With summer over, the travel and souvenir industries now have another threat to ponder: the H1N1 flu specter. Concerns over the spread of the H1N1 virus may convince more Americans to stay at home during the upcoming holiday season, during which time as many as 60 million people travel at least 50 miles from home, according to the AAA. Flu fears swept through Latin America earlier this year, prompting the Argentinean government to prohibit anyone under the age of 18 from going to shopping malls, while in Mexico, malls, bars, theaters and churches were hit by significant downturns in attendance and/or short-term closures, either voluntary or state ordered. Even without substantial outbreaks, mixed signals about the economy remain a major concern. "It has definitely been slow this year," says Raymond Chio, sales manager at Pacific Trading Inc. "We're hoping that it's going to get slightly better as the year winds down."

"It's certainly had an effect," adds Felicia Riccardo, owner and president of Starlinks Gifts. "We are such a niche market that it's necessary to find creative ways to broaden that market." Starlinks, which specializes in metaphysical and fantasy themed jewelry and gifts, has seen an upswing in business since in September. "It's definitely been picking up," Riccardo says. "People are looking to make purchases for the holidays, and in general they seem to be in a lighter mood. That said, certain things have remained strong sellers for us for a long time." In particular, she says, anything that connotes protection or good fortune has been doing well. "There's usually a mix of love and health related items, but anything to do with good luck or making money is doing really well now."

Popular items include a line of charms (priced $12.95 to $20.95 retail; wholesale prices on request) featuring the Star of Solomon, denoting wisdom, intuition, and understanding; the Pentacle of Eden (love); and the Eye of Horus (health, strength and vigor). Also selling well are the store's divining rods ($51.95 retail), purporting to be useful in finding missing items and buried artifacts, locating energy lines and detecting underground water or metal. Starlinks has also recently signed a deal with artist, Anne Stokes, an illustrator specializing in the sword and sorcery genre, including designs for the "Dungeons & Dragons" line, not only for pendants, but also for greeting cards and a Stokes calendar, the first calendar that Starlinks has ever offered. "That's an example of our willingness to try something new, to expand," Riccardo says. "We've also added a line of birthday cards since our Yuletide cards have proven to be strong sellers." Such cards retail for $20.95 per six pack.

The company has also recently expanded its offerings to include sets of runes (stone and wooden), which range from $24.95 to $50 retail, as well as "Keys to the Soul," which are key shaped pendants featuring gemstones and a mystical code of the 72 Names of God, along with an inside hollow for wearers to place a personal note. The six keys retail for $98.95 each.

Similarly, Siskiyou Fine Pewter & Gifts is succeeding by dominating its niche, according to marketing communications manager, Karyn Christensen. The company began 25 years ago, creating and selling uniquely designed pewter belt buckles, but has since expanded to become a leading supplier of licensed sports products, including everything from glassware (including thermoses and travel mugs) and gift boxes, to candles, wallets, checkbook covers and trailer hitch covers. Additionally, Siskiyou acquired Bergamot Gifts' sports product and gifts lines in August, as well as its Alfred Hitch Cover line of trailer hitch covers. Bergamot will continue to focus on its other metalwork products.

"The biggest challenge we face is the heavy competition with licensed merchandise," Christensen says, noting that Siskiyou's clients include Major League Baseball, the NFL, the NHL, NASCAR, Ford, Dodge and John Deere. "Being on the web, as strong as we are, helps us a lot; not just with the big distributors but also with the mom and pop stores around the country. A lot of the big chains have cut back, but as long as the smaller stores continue the good fight, we'll be in good shape." Doing particularly well at the moment are electronics and cell phone accessories, she notes. "That has really been driven by people asking for it, rather than us or someone else just offering it," Christensen says. "There isn't a lot of licensed accessories in that area, so there's less competition for us."

Face plates for BlackBerry Storms and cell phones, as well as straps for iPhones featuring the logos and colors of major league sports teams, have been especially strong sellers, she says. Siskiyou will maximize its marketing efforts over the next several months, Christensen adds. "There are a lot of the grass roots marketing methods that are tried and true, like email marketing, direct mail to customers, and a lot of direct phone calls. Overall, the frequency of customer contact will be increasing."

The company also plans to completely change its website during the first quarter of 2010, she adds. "We want to update it by adding features that allow our customers more control over their own business, more access to product updates and increased access to us." Christensen says that about ten percent of Siskiyou's customer database is currently testing the new website's capabilities.

Also planning to take a closer look, at its website is Trippies Gifts, according to sales manager, Bill Graves. "A lot of our traffic comes from trade shows, email and faxes," he says of the company, which specializes in figurines, frames and plaques. "But our website is a potentially great tool that is not being used as well as it could be."

Trippies' wildlife and farm animals are its best sellers, Graves says. A 13-inch tall rooster is priced for wholesalers at $16.60 per four pack ($14.95 per pack for two or more, $13.80 per pack of four or more), while a ready to strike six inch-tall rattlesnake figure is priced at $8.50 per eight pack ($7.65 per pack for three or more, $7 per pack for eight or more). The store also offers lamps, decorative plates, clocks and other keepsakes, all with nature themes. "Business has been soft for most of the year," Graves says, "but we're looking forward to the fourth quarter, which always has been strong for us." In addition to the already in-place discounts for bulk orders, Graves says, Trippies may be more "creative" in pricing, and suggests that reduced rates for shipping may be available for large orders.

Sales have also been slow at KC Creations Inc., according to owner, Ken Cleveland. The company currently offers four pet related product lines: door toppers, leash holders, "Xing" signs and pet finder stickers. "The novelty signs are probably our strongest item right now," Cleveland says of the product, which goes well beyond the yellow "Deer Xing," diamond-shaped signs, to include everything from "Manatee Xing," and "Hummingbird Xing," to each of the 12 signs of the zodiac, all for $2 each. A large variety of breed-specific dog and cat door toppers are priced at $11 and $10 each.

Chio at Pacific Trading also reports slow sales this year, though he adds, "Things have been slightly better in the past couple of months." Pacific specializes in fantasy figurines, with angels and fairies amongst its strongest sellers. Alongside the gentle "Fairy Voodoo" and "My Three Kitties" fairy figurines, however, Pacific's best sellers include the more gothic toned "Skull Stealer" (all priced at $18). "We plan to try adjusting our pricing to attract more customers," Chio says, "and next year we'll be adding some features to our website that will make it more user friendly."

At Puzzled Inc., 3-D wooden puzzles remain the top sellers, according to vice president, Tom Tal. In addition to its line of ships, trains, dragons and global landmarks, Puzzled Inc. also features a Special Sales section on its website, featuring moray eels, Uzi pistols and other unusual puzzles. "This year, so far, has been okay, but the trade shows have been shrinking and that's a problem," Tal remarks.

Help may be on the way on that front, however. Starlinks' Riccardo says The Whole Living Virtual Trade Expo (www.theleftside.com/WholeLivingExpo/WLifeExpoJan2009.pdf), held in January, was a success, in part due to the fact that both wholesalers and customers could interact over the Internet rather than go through the expenditure of traveling and accommodations, setting up exhibits, and so forth.

"If wholesalers and retailers aren't willing or able to participate in a standard trade show, it's a no-win situation for everybody," she says. "But this didn't cost us anything as vendors, and it opened up all these vendors' customer databases to the other vendors." A web based trade show? What will they think of next?

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